Another source of competition hindrance are laws and regulations from outside the financial sphere. The overall legal framework, albeit untouched by the financial regulator, might unduly interfere with competition in DFS. Some ways this could happen would be by impeding the regulator from having a mandate over competition in DFS, granting conflicting mandates with other authorities or even by taxing competitors unfairly. Lack of regulatory coordination or excessive red tape can lead to these undesired outcomes. It is advised a clear, well defined regulatory perimeter among agencies engaged in competition topics.
Country Examples
Payment Services Directive 2 (PSD2) creates a more competitive environment among banks and payment service providers, even though it isn’t part of the EU’s competition legal framework. This piece of European regulation broke down data silos, heightened connectivity with APIs and allowed new services to be offered, thereby stimulating innovation and giving customers more control over their usage of DFS1.
1. Soursourian, M. and A. Plaitakis (2019), “Fair Play: Ensuring Competition in Digital Financial Services”, CGAP, Washington, DC, https://www.cgap.org/research/publication/fair-play-ensuring-competition-in-digital-financial-services (accessed on 30 August 2025).
